The Securities and Exchange Regulator of Cambodia (SERC), Seoul-based Global Green Growth Institute (GGGI), and UN Economic and Social Commission for Asia and the Pacific (ESCAP) have entered into a memorandum of agreement (MoA) to support the Kingdom’s green bond market and zero-carbon ambitions.

The MoA was signed on February 23 between SERC director-general Sou Socheat, GGGI Cambodia country representative Shomi Kim, and Deanna Morris, economic affairs officer at ESCAP’s Macroeconomic Policy and Financing for Development Division.

The deal seeks to “accelerate financing towards green, sustainable and net-zero projects in Cambodia”, the UN agency affirmed in a statement later that day.

“As part of this partnership, the Cambodia Sustainable Bond Accelerator: Empowering Issuers through Technical Assistance programme was also launched, in collaboration with Credit Guarantee and Investment Facility [CGIF]” and Mauritius-based GuarantCo Ltd, a member of the London-headquartered Private Infrastructure Development Group (PIDG), it noted.

Speaking in the statement, the securities chief said that, “acknowledging the urgent need to combat climate change, SERC has taken serious action to support sustainable development through promoting the issuance of green, sustainability, and sustainability-linked bonds, and has been working closely with development partners to do so.

“I strongly believe that through this cooperation with ESCAP and GGGI, with the support of the CGIF and GuarantCo, we will be able to achieve our goal and bring Cambodia’s capital market to another level by promoting sustainable development,” Socheat said.

“Fighting climate change is the responsibility of us all, so please join us in issuing and investing in green, sustainability and sustainability-linked bonds in Cambodia,” he added.

GGGI director-general Frank Rijsberman commented in the statement: “This collaborative initiative represents a significant commitment to support the issuance of green and sustainability bonds in Cambodia.

“GGGI is honoured to support the Royal Government of Cambodia in maturing the thematic bond market through private sector participation and enhancing the country’s sustainable finance in the pursuit of a greener economy,” he said.

UN undersecretary-general and ESCAP executive secretary Armida Salsiah Alisjahbana added: “Green, sustainability and sustainability-linked bonds have demonstrated to be transformative investment vehicles to channel financing towards green and sustainable initiatives.

“Through our partnership with SERC and GGGI we are proud to be working to accelerate financing towards climate adaptation and mitigation initiatives in Cambodia. We are also pleased that the initiative has generated collaboration and support from the CGIF and GuarantCo as key collaborators,” she was quoted as saying.

The statement underscored the Kingdom’s “substantial” financing needs to respond to climate change and achieve its nationally determined contributions (NDC).

“Without climate adaptation and mitigation investment, it is estimated that the impact of climate change could cost Cambodia one per cent of GDP [gross domestic product] per year for the next decade and could potentially wipe out all economic gains by 2050.

“According to the latest NDCs, Cambodia’s climate mitigation and adaptation plans would require total funding of roughly $7.8 billion. Innovative financing instruments such as green and sustainable bonds have a strong potential to close this financing gap by driving institutional and private capital to prioritise the sustainability agenda.

“The Cambodia Sustainable Bond Accelerator initiative builds on the ESCAP, GGGI and SERC partnership, which aims to accelerate the development of Cambodia’s green and sustainable bond market and associated policies, tools and mechanisms to facilitate financing towards climate mitigation and adaptation initiatives.

“Through a series of targeted measures focusing on both issuance and post-issuance processes, the partnership will contribute to enhancing the ability and interest of issuers in Cambodia to move from traditional bond issuance to green, sustainability and sustainability-linked issuance, and ultimately expand climate-related investments in Cambodia,” it said.